EXECUTIVE SUMMARYThe Indian automobile industry is one of the world's largest industries and a key sector of the economy. The automobile industry is one of the leading industries in India and today one of the fastest growing industries in the world in terms of vehicle manufacturing. The automobile sector of the Indian industry is one of the most successful sectors of the Indian economy, which has largely added to the creation of India an important intention for many international players in the automobile industry who want to register their business in India. The automobile industry in India is growing at 18 percent annually. The Indian automobile sector was opened for foreign investment in 1991. 100% FDI is allowed in the automobile industry. FDI flows into the automobile industry have been growing at an increasing rate as India has witnessed major economic liberalization in various industries over the years. The automobile sector in India is growing at 18 percent annually. The fundamental advantages offered by India in the automobile sector include advanced technology, cost-effectiveness and efficient workforce. In addition, India has a well-developed and competent automobile ancillary industry as well as automobile testing and R&D centers. The Indian automobile sector ranks third in three-wheeler manufacturing and second in two-wheeler manufacturing. The main investing countries are Mauritius, the United States, Japan, the United Kingdom, Germany, the Netherlands and South Korea. The main objective of this research is to study FDI in Indian automobile sector. The researcher used primary and secondary data to achieve all the research objectives.INTRODUCTIONObjective of the studya. Study the concept of foreign direct investmentb. To examine the F...... middle of paper ......ndustry.ProductivityThe performance of the Indian automobile industry with respect to productivity growth, partial and total production productivity of the industry Indian automobile industry were calculated from the period 1990-91 to 2010-11, using the Divisia-Tornquist index to estimate total factor productivity growth. The author finds that the domestic auto industry has experienced negative and insignificant productivity growth over the past decade and a half. Among the partial factor productivity indices, only labor productivity showed significant improvement, while the productivity of the other three inputs (capital, energy and materials) showed no significant improvement. Labor productivity increased mainly due to the increase in capital intensity, which increased at a rate of 0.14 percent per year between 1990-91 and 2010-11.